ADA Tests Critical Support at $0.61 as $2.3B Liquidity Drain Pressures Cardano Bulls

Quick Take

• ADA trading at $0.61 (down 0.7% in 24h)
• $2.3 billion liquidity drain over four days pressures long-term support
• Testing lower Bollinger Band at $0.59 with oversold momentum building
• Following broader crypto weakness as Bitcoin faces resistance

Market Events Driving Cardano Price Movement

The dominant factor affecting ADA price over the past week has been a significant technical correction that stripped over $2.3 billion in liquidity from Cardano markets across four trading days. This substantial outflow represents one of the most concentrated periods of selling pressure ADA has experienced in recent months, pushing the token to retest critical long-term support levels.

The liquidity drain began intensifying on October 28th when ADA price initially approached local support at $0.6578. The failure to hold this level triggered additional selling, with the token ultimately declining approximately 24% during the week of October 28 to November 1. This bearish price action appears primarily driven by ADA-specific technical factors rather than broader market catalysts, suggesting profit-taking or position adjustments by large holders.

Trading on technical factors in the absence of major fundamental catalysts, Cardano has been particularly sensitive to support and resistance levels, with each break lower attracting additional selling pressure from algorithmic trading systems and stop-loss orders.

Cardano Technical Analysis: Testing Critical Support Zone

Price Action Context

ADA price currently trades well below all major moving averages, with the token sitting at $0.61 compared to the 200-day SMA at $0.74 and 50-day SMA at $0.76. This positioning indicates a clear bearish trend structure, though the current level coincides with significant long-term support that has historically provided buying interest.

The 24-hour trading volume of $45.8 million on Binance spot markets reflects moderate institutional interest, though well below the elevated volumes typically seen during major breakouts or breakdowns. ADA price has largely followed Bitcoin’s recent weakness, though the 24% decline represents a more severe correction than the broader crypto market.

Key Technical Indicators

The RSI at 37.65 places Cardano in neutral territory with room for further decline before reaching oversold conditions. However, the MACD histogram showing a slight positive reading of 0.0017 suggests bullish momentum may be building despite the overall negative MACD reading of -0.0372.

Bollinger Bands positioning tells a compelling story, with ADA’s %B position at 0.1902 indicating the token trades near the lower band at $0.59. This positioning often precedes either a bounce back toward the middle band or a breakdown below support with increased volatility.

Critical Price Levels for Cardano Traders

Immediate Levels (24-48 hours)

• Resistance: $0.65 (20-day SMA and middle Bollinger Band)
• Support: $0.59 (lower Bollinger Band and psychological level)

Breakout/Breakdown Scenarios

A break below $0.59 support could trigger accelerated selling toward the next major support zone at $0.54, representing ADA’s 52-week low. Conversely, a successful defense of current levels with volume expansion could target initial resistance at $0.65, with a break above potentially opening the path toward $0.71 upper Bollinger Band resistance.

ADA Correlation Analysis

• Bitcoin: ADA has been following Bitcoin’s recent weakness but with amplified volatility, declining more sharply during down moves while showing similar hesitation at support levels
• Traditional markets: Limited correlation with traditional assets during this technical correction, suggesting crypto-specific factors dominating price action
• Sector peers: Cardano’s 24% weekly decline exceeds most major altcoins, indicating ADA-specific selling pressure beyond general market weakness

Trading Outlook: Cardano Near-Term Prospects

Bullish Case

A successful hold above $0.59 support with improving volume could signal the completion of the correction phase. Target levels include $0.65 resistance (20-day SMA) initially, followed by $0.71 if momentum builds. Improving MACD histogram readings suggest underlying momentum may be shifting despite the overall bearish structure.

Bearish Case

Failure to maintain $0.59 support opens the door for a test of $0.54 (52-week low), with potential for further weakness toward the strong support zone at $0.27. The current positioning below all major moving averages suggests the path of least resistance remains lower without significant buying interest.

Risk Management

Conservative traders should consider stop-losses below $0.57 to limit downside exposure, while those seeking entry opportunities might wait for a clear break above $0.65 with volume confirmation. Given the current daily ATR of $0.05, position sizing should account for potential 8-10% daily volatility swings.

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